Feb
9
The local realestate maket expectations have settled down. If you are selling you know that the game has changed. If you are buying you are looking to pay as little as possible. The power roles have changed is all. Buyers have what seller’s want. Seller’s have what buyer’s want, well if it is the right price. And the bank has what both buyer and seller want. The Money! In between the desire to sell and to buy there is often what is called a “Short Sale.”
I am reminded of the children’s story of The Town Mouse and the Country Mouse and the moral of that story, “better beans and bacon in peace than cakes and ale in fear.” What does that have to do with real estate?
Ask anyone going through losing their job, their home, their dignity.
Our local newspaper comes out daily except Saturday and it has always been the local joke amongst the old timers, “looked in the obits today and I wasn’t there so I am doing okay, still lookin’ down at the sod.” What has changed is that they still look at the obits but they go to the back of the paper and look at the list of foreclosure notices and notice of defaults list too. And they think to themselves, “whew, made it through another day.”
While it is not funny, at all, there are some lessons here that will shape how we think of how we get and spend money, from now on, for this generation at least. My dad, Dean, was a Realtor during the 50’s and 60’s here in Livingston County. He would say that “people always pay for their houses first” it was the most important bill that they had. Still is today. Home mortgages and home values should, in a perfect world, be the same and with the value going up and the mortgage going down. We love it when equity goes up and mortgages go down, don’t we? But when equity(what the house is worth) is lower than what is owed, we think of that as a disaster. We think of it as a ‘right’ a God given right that the mortgage balance should always be lower than our homes value. Personally, I think that this is not good reasoning at all. A home is a place to live and to be safe and secure, warm and nouishing and all of that. But is not a valid “investment” at all in the normal sense of profit and lost, at least for the short term.
And, if we can afford to live there, no matter what, the mortgage payment comes first. If we can no longer afford to live there, then we do have to find a solution. It may be a short sale. ” But what if they come after me with a deficiency?” you may ask.
So, let them come. But before than happens, negotiate with the lender as best you can first, let your Realtor do this for you. And, if you just can’t pay that deficiency, if there is one assesed at all, and there is a huge possibility of that not happening, as the very very last resort, you have to use the most powerful tool the borrower has in their “rights” bag and that is for you and your attorney to decide and discuss.But, do not use that as a way to stop your problems, only when all else has failed.
About Bill Park. Bill Park has been a licensed Realtor in Michigan since 1986. He is an advisor on real estate matters that pertain to the buying and selling of homes, land and commercial property.People hire him to advise, advocate and negotiate on their behalf. He is a professional distressed property negotiator and expert. He assists home owners who are upside down in their house value and mortgage debt with disposing of the property and negotiating an agreement with the lender and the property seller to reach a settlement on the amount owed. He also assists buyers in how to find and negotiate a short sale property. To contact Bill Park, reach him by email at billpark@kw.com
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